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Helpful hints to improve your loan eligibility

How to boost your eligibility for a homeowner loan

Secured Loans > Our Loans > Homeowner Loans > How to boost your eligibility for a homeowner loan

Thinking about a homeowner loan? Discover how to find the right loan for you with these eligibility-boosting tips. 

A homeowner loan is a big decision – for both you and your lender. As you can borrow tens of thousands of pounds, your lender needs to be sure you are suitable for the loan. 

Let’s take a look at how you can improve your eligibility when it comes to homeowner loans.

Think about your spending

Homeowner loan lenders will take a good look at your income and expenditure. This isn’t because they’re nosy – it’s because they need to work out your affordability. In other words, they’re checking to see if you can afford to repay the loan with your current finances.  

Lenders will pay attention to all the money coming in and out of your account, including:

  • Regular payments, such as your mortgage, loans, credit cards and any car finance
  • Other regular amounts, such as travel, food, clothes, and entertainment 
  • Your regular income

As a rule of thumb, you should keep a close eye on your spending for at least three months before you apply for a homeowner loan. Being consistently responsible proves that you can afford the repayments throughout the loan term.

If your budget is a little tight every month, look at what you can easily cut back on. You can do this by looking at your recent transactions and Direct Debits coming out of your account. Reducing the amount you eat out, reviewing utility bills, or cancelling subscriptions you no longer use could be good ways of freeing up your finances – but only you know what works for your situation.

Review your credit report

Before applying for any credit, you should give your credit report a good once-over. Your credit report gives lenders an idea of how you’ve handled your finances over the past six years; including your current and past credit accounts, your payment history, and any shared finances. 

Reviewing your credit report helps you understand what lenders see when they review your homeowner loan application.

Before you apply for a homeowner loan, take a good look at your credit report and ask yourself these key questions:

Have you made any mistakes?

First things first, you’ll need to review your credit report for any issues, such as:

  • Any insolvencies or bankruptcies 
  • Any missed or late payments, defaults or County Court Judgements
  • Any signs of fraud or identity theft 

In the majority of cases negative factors like these will drop off your report after six years – so if it’s nearly six years since the error was made, you could hold off applying until they have cleared from your credit report.

If the negative factors are recent and you still want to apply, you could narrow down your search to bad credit homeowner loans. There are lenders, like Evolution Money, who can help you find a loan – even if you have had financial issues in the past. 

Are there any errors on your report?

You might spot something on your credit report that’s outdated or inaccurate. For example, you could find:

  • An account you shut down still showing as active
  • Outdated information, like an old address or your maiden name
  • Any typos or errors in your personal information
  • A reported late or missed payment that you know you paid on time

Any errors on your report could lead to your application being declined. For example, your lender will need to confirm your identity in order to process the loan – and any mismatching information could delay the application process. 

You should raise any inconsistencies or errors with the credit report agency. They should update your report with the right information. 

How many credit applications have you made?

Every time you apply for credit, a mark will appear on your credit report. You can see your application history in your credit report – and so will any potential lenders.

Too many applications in a short space of time can damage your loan eligibility. That’s because it can show that you might be desperate for finance and are willing to apply left, right, and centre. Taking a more cautious approach and checking if you’re eligible before you apply can help you cut down applications. 

Once you’ve checked that you are eligible for a loan, then you can apply for a homeowner loan. 

Who do you share finances with?

If you share a mortgage or a joint loan with someone, the lender may also look at their credit history. This person is often called a financial connection – and their credit file may impact any application. 

This isn’t always a problem. However, if your financial connection has made mistakes with their money, your loan eligibility could suffer. 

You can request to remove a financial connection from your report, providing you close the shared product down. This could help boost your homeowner loan eligibility.

Reduce the money you owe

Reducing the credit you use will boost your affordability and could improve your credit score. You could do this by:

  • Paying off a loan early 
  • Reducing your credit card balance
  • Closing down a credit card account

Having less debt in your name could help improve your loan eligibility. If you reduce your debts before you apply for a homeowner loan, the lender may feel more confident that you can afford the loan repayments – as you won’t be overburdened with other commitments.

Find the right homeowner loan for you

When it comes to applying for a homeowner loan, it’s important to find the right one for you and your circumstances.

Whether your credit score is in perfect shape or needs a little improvement, there are many different homeowner loans on the market

At Evolution Money, we’ll talk you through every stage of your loan application. What’s more, we’ll tell you if you’re likely to be accepted without affecting your credit score – and we’ll give you a completely no-obligation quote.

Warning: Late payment can cause you serious money problems. For help, go to moneyhelper.org.uk
Representative 28.96% APRC (Variable) - For a typical loan of £20,950 over 85 months with a variable interest rate of 23.00% per annum, your monthly repayments would be £537.44. Including a Product Fee of £2,095.00 (10% of the loan amount) and a Lending Fee of £714.00, the total amount repayable is £45,682.15. Annual Interest Rates ranging from 11.7% to 46.5% (variable). Maximum 50.00% APRC. The loan must be paid back by your 70th birthday. Read more.

Think carefully before securing debts against your home your home may be repossessed if you do not keep up repayments on your mortgage or any other loan secured against it. If you are thinking of consolidating existing borrowing, you should be aware that you may be extending the terms of the debt and increasing the total amount you repay.
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